The Retro Look

We’ve gone for a Retro look for our cover on this issue, no particular reason other than we felt it would catch the eye. It’s important to us that we stand out on everything that we do ….. hopefully for the right reasons! 

One might argue that there’s been an element of Retro to the recent shenanigans at the border over the past few months. Seems like a “throw back” to the days of old;  one will (I’m sure) be forgiven for applying this perception to the recent antics of what is meant to be a modern democratic country considered the 4th largest economy in Europe. It seems however that the Spanish Govt is intent in playing its part in becoming the laughing stock of Europe, by ignoring the wishes of 30,000 people in expressing their right to determine their future. It seems that aggressively pursuing this, is far more important than addressing an economy falling to pieces, with an average unemployment rate of 30% and let’s not forget the matter of corruption scandals.

You might wonder why on earth I am referring to the above as opposed to discussing Property. Well, like it or not Gibraltar’s recent fame in the headlines across Europe is hardly something that we aspire to. It’s unfortunate that more often than not the international media will invariably get it wrong on so many levels and in doing so will not present the realities of Gibraltar. Even more unfortunate is the media campaign clearly driven by Madrid in which Gibraltar has been accused of pretty much everything under the sun in order to discredit our reputation and in an attempt to stall the very real gains that we have made in the past decade. 

So, has all of this affected us? Well, from a real estate perspective the short answer is no, in fact some may argue that it has only encouraged people to stay firmly placed on the rock. Clearly elements of the commercial / retail sector have been hard hit, but my concern is the perception that companies and individuals (non-local) may have and how this concern may play out in their thinking and forecasts. 

As a Gibraltarian, I have seen these situations played out on many occasions and therefore although hugely irritated by the impact of these tensions, I take the view that it’s just another tantrum from our neighbour which WILL simmer down. 

But what of the many who aren’t versed in this political play? Well, my advice is Don’t Panic! You may prefer not to take advice from the estate agent on this one, after all, we do have that awful reputation of talking pretty much anything up…;) however, I would ask that you consider one thing….History! If our past is anything to go by, it will undoubtedly suggest that we come out of these episodes far better that we went in. You don’t need to go far back to revisit the failed joint sovereignty proposals in 2000 and the subsequent negotiation of the 2006 constitution which re-affirmed and advanced our position as a nation. Whereas I am not about to enter into a history lesson, my short message to those unaware or unsure of what we have witnessed over the past few months, is that you are in a safe, well regulated, vibrant and ambitious jurisdiction, with a strong economy; it will be all of these things that will continue to see us through the difficult times and lead us into continued success.

The Market.

As mentioned we have seen no negative impact on the market deriving from the current political tensions. The year so far has exceeded our expectations and as an update from our last Magazine issue we are delighted to confirm that all bar one of the properties at Buena Vista Park Villas has been sold. We are particularly pleased with the fact that BMI was involved in over 60% of agent sales. From our perspective this gives us a great deal of confidence in the growth of the High Value Market, and an element of satisfaction that BMI plays a significant role in this sector.

Market trends will always play a part in sales and although not significant in property on the Rock, there is no doubt that the summer months can be slower than other periods. In this respect, we are uncertain on whether the impact of the political tensions has played a part in a slight dip in the volume of sales between the £400,000 & £600,000 range. Our instinct leans more towards the fact that the first half of the year saw a 15%-25% increase in sale prices and an even bigger increase in lettings – we believe that the market may well be adjusting upwards, hence the breather.

To expand further on prices, we have always taken the view that it is not the agent but the market that dictates pricing. We are a firm believer in allowing the very simple laws of demand and supply be the principle factor in driving price. There will always be an element of guidance and influence from Estate Agents as should be the case, but pricing is fundamentally driven and steered by a very simple method…….what did the last one sell for? Of late we are somewhat concerned by the fact that some clients of ours are being advised to increase the sale prices of their properties to levels which are upwards of 30% from recent comparable sales achieved. Whereas BMI has in the past few months advised vendors to consider adjusting their prices accordingly due to increased demand, we believe there is a duty to the client in advising accordingly and based on real examples. In essence there needs to be clear evidence to support a market appraisal. 

If you are considering selling your property, get advice from more than one agent, do your homework and then come and talk to us….;) seriously though, it’s not that hard to get a feel for the mood in the market and its important in our view that we don’t over inflate expectation in what is a strong and confident market. To summarise………let the market dictate.

As I write this article news of Barclays and its somewhat aggressive cut down has just hit the media. It’s clearly sad whilst also ironic, that a bank that has been with us for well over 100 years has decided to essentially pull out of an economy that has posted consistent growth in GDP during the worst Global economic crisis since the 30’s, with zero bank repossessions and recognised as one of the most prosperous nations worldwide. We have to nevertheless accept that Barclays, has of late undertaken some serious cut backs worldwide and in this respect it is encouraging to hear that they will still have a presence in Gibraltar albeit a limited one. It is of course important that the Govt reacts to the loss of a retail bank, which will place some pressure on the exposure to the market that other banks will undoubtedly be exposed to and there will be a need to address how the gap is filled. 

I appreciate that this article is somewhat longer than normal, but hey, there’s been quite a bit to say and quite frankly the antics from the hard core right in Madrid have p$%£*d me off – my apologies if I’ve edged a little too much into the politics on this occasion. I trust though that at the very least you have enjoyed the read, be it whilst waiting at a reception, in the queue, or in the ……..

Lastly, thanks to all those partners, business introducers and clients who support our magazine and to our new advertisers, AKS, The Caleta and Verralls.

Until the next one.

Louis C. Montegriffo

Managing Director.